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President Barack Obama has signed federal legislation extending the Internet Tax Freedom Act (ITFA) through December 11, 2014 as part of the joint resolution which made continuing appropriations for fiscal year 2015. The ITFA was previously set to expire on November 1, 2014. The ITFA bars state and local governments from imposing multiple or discriminatory taxes on electronic commerce and taxes on Internet access.

 

For an update to this news item, see Internet Tax Freedom Act Extended Until October 1, 2015, Permanent Extension Introduced.

 

(P.L. 113-164 (H.J. Res. 124), 113th Congress, 2nd Session, Laws 2014)

(09/26/2014)

The Streamlined Sales and Use Tax (SST) Governing Board has  issued a best practices matrix which provides answers to whether the state follows the best practices set forth in the SST Agreement regarding deal-of-the-day vouchers. All SST Member states are to complete and publish their position on the best practices.  The matrix outlines if the “best practiceas approved by the Streamlined Sales Tax Governing Board (SSTGB) for each of the products, procedures, services, or transactions identified in the chartis followed by the specific state. The following best practice descriptions are listed in the matrix along with whether the state follows the best practice:

 

1.       The member state administers the difference between the value of a voucher allowed by the seller and the amount the purchaser paid for the voucher as a discount that is not included in the sales price (i.e., same treatment as a seller’s in-store coupon), provided the seller is not reimbursed by a third party, in money or otherwise, for some or all of that difference.

2.       The member state provides that when the discount on a voucher will be fully reimbursed by a third party the seller is to use the face value of the voucher (i.e., same as the treatment of a manufacturer's coupon) and not the price paid by the purchaser as the measure (sales price) that is subject to tax.

3.       The member state provides that costs and expenses of the seller are not deductible from the sales price and are included in the measure (sales price) that is subject to tax. Further, reductions in the amount of consideration received by the seller from the third party that issued, marketed, or distributed the vouchers, such as advertising or marketing expenses, are costs or expenses of the seller.

 

Unless otherwise listed below, the SST member states have published the Best Practices Matrix and follow the three best practices listed above.

 

The following SST member states have issued the matrix but don’t follow some or all of the best practices listed above as of April 2014: Georgia, Kansas, Nebraska, New Jersey, and Ohio.

 

The following SST member states have not yet issued the matrix as of April 2014: Tennessee, Utah, Vermont, and Wyoming.  Copies of the matrix can be found on each specific state information page on the SST Web page at http://www.streamlinedsalestax.org/index.php?page=state-info.

(05/06/2014)

Effective January 1, 2014, a collection allowance of 1.5% of the tax due, not to exceed $70 for each reporting period, is available for South Dakota retailers who timely file and pay tax returns electronically through the Department of Revenue’s online tax filing and payment system. However, no allowance is allowed if the taxpayer has selected a certified service provider (CSP) as its agent and the CSP receives a monetary allowance as provided by the Streamlined Sales and Use Tax Agreement for performing the retailer’s sales and use tax functions.  The collection allowance applies to all taxes reported on the sales tax return form other than contractor excise tax. This includes sales tax, use tax, tourism tax, municipal sales tax, telecommunications gross receipts tax, excise tax on farm machinery, amusement device tax, motor vehicle leasing tax, intermediate care facility tax, Sioux Falls lodging tax, and tax collection agreement taxes. Licensed retailers who have outstanding tax returns or outstanding tax balances due or do not file and pay electronically will not receive the allowance. (Release, South Dakota Department of Revenue, November 6, 2013)

(05/06/2014)

Representative Lamar Smith (Republican, Texas) has introduced a bill to bar multiple taxes on digital goods and services.  Smith had proposed an earlier bill which failed to pass.  This bill is a revised version of the earlier bill. The proposed bill – called the Digital Goods and Services Tax Fairness Act of 2013 – would only allow a state to tax sales of digital goods and services to customers with a tax address within that state. Additionally, states would be barred from imposing multiple taxes on digital goods. The bill defines digital goods as sounds, images, data and facts maintained in digital form. Internet access service is not included as a digital good in the bill. (H.R. 3724)

(01/28/2014)

Effective January 1, 2014, a collection allowance of 1.5% of the tax due is available for South Dakota retailers who timely file and pay tax returns electronically through the Department of Revenue. The allowance is not to exceed $70 for each reporting period.The allowance applies to all taxes reported on the sales tax return form, including sales tax, use tax, tourism tax, municipal sales tax, telecommunications gross receipts tax, excise tax on farm machinery, amusement device tax, motor vehicle leasing tax, intermediate care facility tax, Sioux Falls lodging tax, and tax collection agreement taxes. It does not apply to contractors’ excise tax returns. The allowance is not available to licensed retailers who have outstanding tax returns or outstanding tax balances due or those who do not file and pay electronically.Any individual who has selected a certified service provider (CSP) as its agent is not entitled to the collection allowance credit if the CSP receives a monetary allowance as provided by the Streamlined Sales and Use Tax Agreement for performing the retailer’s sales and use tax functions in South Dakota. (Release, South Dakota Department of Revenue, November 6, 2013)

(11/26/2013)

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